Asian shares gain after central banks slash rates

Asian shares gain after central banks slash rates

Hong Kong: Asian shares rose on Friday following record rate cuts by central banks in Europe, though risk aversion remained, lifting the dollar ahead of what is expected to be dismal US employment data.

Oil prices steadied after slumping $3 on Thursday to their lowest level in nearly four years amid bleak economic data that could spell a deeper decline in global energy demand.

Caution was likely to prevail in broader global markets despite the recent sell-offs, with concerns also focusing on the fate of US auto makers, which are seeking billions of dollars in government aid.

The MSCI index of Asian shares outside Japan rose 0.5% as of 8:10am, though it was still en route to a weekly loss of nearly 4%.

The Nikkei average was up 0.7%, while key indexes in South Korea, Hong Kong and Singapore were up between 1 and 2%.

Shares in Taiwan fell, while markets in China and Australia were little changed.

The overall gains followed steep rate cuts by central banks worldwide as they respond to a deepening global downturn.

On Thursday the European Central Bank dropped its benchmark rate by 0.75 percentage point, while Sweden lopped 1.75 percentage points and the Bank of England cut rates by 1 percentage point.

Governments are also taking action. South Korea repeated on Friday pledges to do more to keep Asia’s fourth-largest economy on tack, and listed automobile, semiconductor and petrochemical firms as those hardest hit by the global downturn.